SIEMENS V. DOMINGO (LABOR)

Issue: Whether or not there was constructive dismissal that would entitle Domingo to his monetary claims.

YES; Domingo was constructively dismissed from employment.

A diminution of pay is prejudicial to the employee and amounts to constructive dismissal. The gauge for constructive dismissal is whether a reasonable person in the employee's position would feel compelled to give up his employment under the prevailing circumstances.

CONSTRUCTIVE DISMISSAL is defined as quitting when continued employment is rendered impossible, unreasonable, or unlikely as the offer of employment involves a demotion in rank or diminution in pay. It exists when the resignation on the part of the employee was involuntary due to the harsh, hostile, and unfavorable conditions set by the employer. It is brought about by the clear discrimination, insensibility, or disdain shown by an employer which becomes unbearable to the employee. An employee who is forced to surrender his position through the employer's unfair or unreasonable acts is deemed to have been illegally terminated and such termination is deemed to be involuntary.

In the instant case, Domingo's resignation was brought about by the decision of the management of Siemens Philippines not to renew - or work for the renewal of - his consultancy contract with Siemens Germany which clearly resulted in the substantial diminution of his salary. The situation brought about the feeling of oppression which compelled Domingo to resign. The diminution in pay created an adverse working environment that rendered it impossible for Domingo to continue working for Siemens Philippines. His resignation from the company was in reality not his choice but a situation created by the company, thereby amounting to constructive dismissal.